Financial Intelligence Unit – Guideline No. 3 2015
Targeted Financial
Sanctions related to
Terrorism and
Terrorist Financing
GUIDELINES ISSUED BY THE FINANCIAL INTELLIGENCE UNIT UNDER THE
AUTHORITY OF SECTION 9 (4) (e) (iv) OF THE ANTI-MONEY LAUNDERING AND
COUNTERING THE FINANCING OF TERRORISM ACT CAP. 10.11
December 2015
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Financial Intelligence Unit – Guideline No. 3 2015
CONTENTS
INTRODUCTION …………………………………………………………………………………………………… 3
FINANCIAL SANCTIONS – THE BASICS ……………………………………………………………………….3-4
 What are financial sanctions
 Why does Guyana apply financial sanctions?
FINANCIAL SANCTIONS – ASSET FREEZING AND OTHER MEASURES ………………………………....4-5
 What do financial sanctions measures involve?
 What does an asset freeze do?
 Are frozen funds confiscated by the Financial Intelligence Unit?
 Making funds or other assets available to a designated or specified person or entity.
 Making funds or other assets available for the benefit of a designated or specified person or entity.
 How do sanctions affect a Reporting Entity?
 What does freezing assets mean for a bank that holding funds belonging to a designated person or entity?
FINANCIAL SANCTIONS – UNFREEZING FUNDS OR OTHER ASSETS OF A DESIGNATED OR
SPECIFIED PERSON OR ENTITY ………………………………………………………………………………….6
 Unfreezing funds or other assets – when there has been a false positive.
FINANCIAL SANCTIONS – DELISTING …………………………………………………………………………..6
 Challenging a specification/listing by Guyana
 Challenging a designation by the United Nations Security Council
FINANCIAL SANCTIONS – AUTHORISING ACCESS TO FROZEN FUNDS OR OTHER ASSETS…………6-7
 What is an Authorization?
 What activities might an authorization cover?
 What is a basic expense of an individual?
 How can one apply for authorized access to frozen funds or other assets?
UNITED NATIONS SANCTIONS LIST – UNSCR 1267 ……………………………………...................................7
 Notice of updates to the Consolidated List
 How often is the Consolidated List updated?
 How soon should a reporting entity implement changes to the Consolidated List?
SPECIFICATION/LISTING BY GUYANA – UNSCR 1373 ………………………………………………………..8
 Notice of updates when an Order is issued.
REPORTING REQUIREMENTS FOR REPORTING ENTITIES …………………………………………………..8
PENALTIES FOR COMMITTING AN OFFENCE UNDER THE FINANCIAL SANCTIONS REGIME ………..9
GLOSSARY OF DEFINITION …………………………………………………………………………………..... 10
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Financial Intelligence Unit – Guideline No. 3 2015
INTRODUCTION
This guideline supplements the Practical Guidance on Targeted Financial Sanctions – Guideline
No. 2 of 2015 issued by the FIU in August 2015. It is for Licensed Financial Institutions (LFIs)
and Designated Non-Financial Businesses or Professions (DNFBPs) referred to hereinafter
collectively as “Reporting Entities” and any other person or entity that might be holding funds or
other assets of a designated or specified person or entity.
The aim of this Guide is to provide Reporting Entities and any other person or entity that might
be holding funds or other assets of a designated or specified person or entity with general
information and guidance on how financial sanctions work in Guyana particularly as they relate
to the freezing, unfreezing, and access to frozen funds of a person or entity designated by the
United Nations Security Council under UNSCR1 1267 or specified by Guyana under section 2(2)
of the AMLCFT Act 2009 in accordance with UNSCR 1373.
FINANCIAL SANCTIONS – THE BASICS
What are financial sanctions?
Financial sanctions invariably include asset freezing measures – which mean that funds are frozen
by a Reporting Entity (for up to five (5) days in accordance with regulation 6(2) of the AMLCFT
Regulations No. 4 of 2015) or by the Courts. Unless authorized by the Minister of Legal Affairs,
or by a Court Order a designated or specified person or entity cannot have access frozen funds or
other assets.
Why does Guyana apply financial sanctions?
Recommendation 6 of the FATF International Standards on combating money laundering and
the financing of terrorism and proliferation requires countries to implement targeted financial
sanctions to comply with the United Nations Security Council Resolutions (UNSCR) that require
countries to freeze, without delay, the funds or other assets of a designated person or entity, and
to ensure that no funds and other assets are made available to or for the benefit of:
(i)
(ii)
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Any person or entity designated by the UNSCR as required by Security Council
resolution 1267 (1999); or
Any person or entity specified by a country pursuant to Security Council resolution
1373(2001)
United Nations Security Council Resolution
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Financial Intelligence Unit – Guideline No. 3 2015
The following Legislation creates certain obligations for Reporting Entities:





The Anti-Money Laundering and Countering the Financing of Terrorism Act 2009
The Anti-Money Laundering and Countering the Financing of Terrorism (Amendment)
Act No. 1 of 2015
The Anti-Money Laundering and Countering the Financing of Terrorism Regulations No.
4 of 2015
The Anti-Money Laundering and Countering the Financing of Terrorism (Amendment)
Regulations 2015 – No. 7 of 2015
The Anti-Money Laundering and Countering the Financing of Terrorism (Amendment)
(No. 2) Bill 2015 – Bill No. 5 of 2015 (which was passed on December 17, 2015)
FINANCIAL SANCTIONS – ASSET FREEZING AND OTHER MEASURES
What do financial sanctions measures involve?
Financial sanctions include an asset freezing regime. Asset freeze comprises of two elements:
• A prohibition on dealing with the funds or other assets belonging to or owned, held or
controlled by a designated or specified person or entity, or making funds or other
assets available, directly or indirectly, to, or for the benefit of, a designated or
specified person or entity; and
• Freezing by a Court.
What does an asset freeze do?
An asset freeze prohibits the transfer, conversion, disposition or movement of any funds or
other assets that are owned or controlled by a designated or specified person or entity on the
basis of, and for the duration of the validity of, an action initiated by the Director of the
Financial Intelligence Unit in accordance with regulation 6(2) of the AMLCFT Regulations No.
4 of 2015 or a court under a freezing mechanism.
Are frozen funds confiscated by the Financial Intelligence Unit?
Frozen funds are NOT confiscated, sequestered or otherwise held by the Financial Intelligence
Unit. This means that the Financial Intelligence Unit cannot pay the liabilities of a designated or
specified person or entity using frozen funds.
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Financial Intelligence Unit – Guideline No. 3 2015
Making funds or other assets available to a designated person or entity
It is a criminal offence to knowingly make funds or other assets available, directly or indirectly,
to a designated or specified person or entity. Making funds or other assets indirectly available to
a designated person or entity would involve the funds or other assets being routed via a third
party. For example, it would be a criminal offence to give funds to a designated or specified
person’s family, friend, business partner or attorney-at-law knowing or suspecting that some or
all of the funds will be given to the designated or specified person or entity. However, the
Minister of Legal Affairs can authorize access to such funds or other assets in accordance with
regulation 5 of the AMLCFT (Amendment) Regulations 2015 - No. 7 of 2015.
Making funds or other assets available for the benefit of a designated person
It is a criminal offence for a person to knowingly, or with reasonable cause to suspect they are
doing so, make funds or other assets available to a third party in circumstances where a
designated o r s p e c i f i e d person o r e n t i t y thereby obtains or is able to obtain a
significant financial benefit.
The aim of this prohibition is to prevent a designated or specified person or entity from having
access to significant additional funds through third parties making payments which the
designated or specified person or entity would otherwise make. It is not intended to prohibit all
payments to non-designated or specified third parties which may benefit a designated or
specified person or entity, but only those where there is a “significant financial benefit”.
How do sanctions affect a Reporting Entity?
It is the responsibility of all Reporting Entities to comply with financial sanctions. Sanctions
might affect a Reporting Entity if it is:
•
Involved in any financial business with OR making funds or other assets
available to or for the benefit of a designated or specified person or entity; or
•
Dealing with or have any designated or specified person or entity as customers,
suppliers, bankers, financiers or investors.
What does freezing assets mean for a bank that holds funds?
In practical terms, access to accounts or other funds held must be blocked. They can only be
dealt with, for example released or paid away by the financial institution (or any other person)
that holds them, under an authorization issued by Minister of Legal Affairs or Order of the Court.
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Financial Intelligence Unit – Guideline No. 3 2015
FINANCIAL SANCTIONS - UNFREEZING FUNDS OR OTHER ASSETS OF A
DESIGNATED PERSON
Unfreezing funds or other assets – when there has been a false positive
Under the Anti-Money Laundering and Countering the Financing of Terrorism Regulations 2015,
the court may upon application revoke a freeze order made in relation to the funds or other assets of
a designated or specified person or entity. Such application may be made based on verifiable
evidence that the person or entity affected is not a designated or specified person or entity and as
such was inadvertently affected by the freezing mechanism (i.e. a false positive).
FINANCIAL SANCTIONS – DELISTING
Challenging a specification when listed by Guyana
Under section 2(3) of the Anti-Money Laundering and Countering the Financing of Terrorism Act
2009 a specified person or entity may apply to the Minister of Finance for a revocation of an Order
specifying him/her.
Challenging a designation by the UN Security Council
Requests for delisting (where a person or entity is designated by the United Nations) may be sent
directly to the Ombudsman of the United Nations Committee by a designated person or entity on his
own behalf OR by the Director of the Financial Intelligence Unit on behalf of the designated person
or entity.
FINANCIAL SANCTIONS - AUTHORIZATION ACCESS TO FROZEN FUNDS OR
OTHER ASSETS
What is an Authorization?
An authorization is a written notice from Minister of Legal Affairs to allow an activity which
would otherwise be prohibited. An authorization may include associated reporting requirements
or other conditions.
What activities might an authorization cover?
An authorization can be granted for a range of purposes. The permitted purposes are typically
set out by the United Nations Security Council Resolution 1452, and may include allowing the
release of frozen funds to pay obligations due by the designated or specified person or entity
under a contract entered into prior to their listing, to meet bank charges, to cover basic
household or business expenses and reasonable legal costs. It should be noted that it is not
within the Minister of Legal Affairs remit to authorize a transaction that is not capable of being
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Financial Intelligence Unit – Guideline No. 3 2015
authorized under regulation 10 of the Anti-Money Laundering and Countering the Financing of
Terrorism Regulations No. 4 of 2015.
What is a basic expense of an individual?
Where an authorization is issued under an exemption for the purpose of meeting basic expenses,
“basic expenses” are commonly defined as:
“payments for foodstuffs, rent or mortgage, medicines and medical treatment, taxes,
insurance premiums, and public utility charges, or exclusively for payment of
reasonable professional fees and reimbursement of incurred expenses associated with
the provision of legal services, or fees or service charges for routine holding or
maintenance of frozen funds or other financial assets or economic resources”
Basic expenses are therefore considered to cover expenditure which is necessary to maintain
basic everyday needs only. In authorizing basic expenses the Minister of Legal Affairs may
consider what is reasonable to meet the everyday needs of a person in the position of the
designated or specified person or entity, taking account of any specific needs of the individual
and their family. However, the Minister of Legal Affairs may not necessarily authorize
access to the full amount requested to allow the designated or specified person or entity to
continue to lead a lavish lifestyle, particularly where this would defeat the purpose of the
designation or specification.
How can one apply for authorized access to frozen funds or other assets?
Applications for authorized access to frozen funds must be made in writing to the Minister of
Legal Affairs.
All applications should sets out clearly the grounds on which authorized access is being
sought and provide all relevant information, full details of the transaction and supporting
documentation.
UNITED NATIONS SANCTIONS LIST – UNSCR 1267
The FIU makes available on its website the Consolidated S a n c t i o n s List of t h e U n i t e d
Nations Security Council.
The Consolidated Sanctions List includes all individuals and entities subject to sanctions
measures imposed by the UN Security Council.
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Financial Intelligence Unit – Guideline No. 3 2015
Notice of updates to the Consolidated List
Reporting entities are notified by the Financial Intelligence Unit whenever there are new listings
of designated persons, when designated persons are de-listed, when listings are changed, or
when there are other significant changes to financial sanctions.
How often is the Consolidated List updated?
There is no predetermined timetable for updating the Consolidated List. Updates are dependent
on when there are changes (i.e. additions, deletions or amendments) to the list of
individuals and entities targeted by the UN.
The FIU issues an email notification at the same time as the publication of financial sanctions
notices and as the Consolidated List is updated.
How soon should a reporting entity implement changes to the Consolidated List?
Changes to the individuals and entities subject to financial sanctions are usually
announced in notices issued by FIU. The notice will usually explain when the changes
are legally effective. Reporting entities need to implement such changes (or put new
versions of the Consolidated List into effect) as soon as practical.
SPECIFICATION/LISTING BY GUYANA – UNSCR 1373
The FIU makes available on its website the Orders issued under section 2(2) of the AMLCFT Act
2009.
Notice of updates when an Order is issued
Reporting entities are notified by the FIU whenever there are new Orders/Specifications by the
Minister of Finance, when an Order has been revoked, or when there are other significant
changes to the status of a specified person or entity.
REPORTING REQUIREMENTS FOR REPORTING ENTITIES
Reporting requirements for reporting entities under the financial sanctions regime are covered
specifically in the Anti-Money Laundering and Countering the Financing of Terrorism
Regulations No. 4 of 2015.
The general position is that Reporting Entities must inform the FIU immediately if it knows, or
has reasonable grounds to believe that a designated or specified person or entity has funds or
other assets in Guyana.
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Financial Intelligence Unit – Guideline No. 3 2015
PENALTIES FOR COMMITTING AN OFFENCE UNDER FINANCIAL SANCTIONS
REGIME
Any person guilty of an offence under section 68A(11) of Anti-Money Laundering and
Countering the Financing of Terrorism (Amendment) Act 2015 shall be liable on summar y
conviction to a fine of not less than five million dollars nor more than one hundred million
dollars or to imprisonment for up to seven years and in the case of a body corporate to a fine of
not less than ten million dollars nor more than two hundred million dollars.
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Financial Intelligence Unit – Guideline No. 3 2015
Glossary of definitions
These definitions do not constitute legal advice.
Term Used
Authorization
Interpretation
A written authorization provided by the Minister of Legal Affairs
which permits a certain transaction or activity which would otherwise
be a breach of sanctions law.
Designated
Person or
Entity
Designated person or entity means any natural or legal person or entity
designated by the Committee of the Security Council established
pursuant to resolution 1267 (1999).
Funds or Other
Assets
The term funds or other assets means any assets, including, but limited to,
financial assets, economic resources, property of very kind, whether
tangible or intangible, movable or immovable, however acquired, and legal
documents or instruments an any form, including electronic or digital,
evidencing title to, or interest in, such funds or other assets, including, but
not limited to, bank credits, travellers cheques, bank cheques, money
orders, shares, securities, bonds, drafts, or letters of credit, and any interest,
dividends or other income on or value accruing from or generated by such
funds or other assets.
Specified Person or Specified person or entity means any natural or legal person or entity
Entity
specified by the Minister of Finance under section 2(2)(1)(A) of the
AMLCFT Act 2009 in accordance with UNSCR 1373
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